Brazil meatpacking scandal over claimed exports of rotten product

ALL eyes in the beef game are keenly watching a Brazilian meatpacking scandal play out, knowing it has the potential to severely damage the big South American producer’s moves on some of Australia’s most lucrative markets.

The BBC is reporting authorities in Brazil have suspended 33 government officials amid allegations that some of the country's biggest meat processors have been selling rotten beef and poultry for years.

Three meat processing plants have also been closed and another 21 are under scrutiny.

Much of the meat produced by the companies accused is exported.

BBC says among those accused is JBS, the world's largest beef exporter, and BRF, the world's top poultry producer.

Australian beef industry analysts said they were receiving reports the move followed a two‑year investigation which revealed health inspectors and politicians had been bribed to overlook unsanitary practices and falsified export documents.

Commonwealth Bank agri analyst Tobin Gorey said Brazil's Agricultural Ministry was saying the the issue was not systemic.

However, reports of rotten and chemically‑adulterated meat being sold in domestic and export markets was the “stuff of PR nightmares,” he said.

The scandal could cause large and lasting reputational damage to the world's largest beef and poultry exporter, he said.

“Reputational damage is so hard to control,” he said.

“Brazil has spent so long working to get back into certain markets.

“Because they have actioned this themselves, this will be one of the nuances of the fallout.”

Brazil last year regained access to the United States fresh beef market and has also taken a large amount of market share from Australia in China over the past year.

Mr Gorey said it was also, along with other members of South America's Mercosur group, currently in talks with the European Union over a free trade agreement.

Concerns over meat safety have long been a sticking point of the Mercosur‑EU deal.